The Energy Fuels Inc (UUUU) stock is extending gains after the news release in which the company has announced that they have signed a new deal that is outside the uranium space. UUUU the Energy Fuel Company is the biggest producer of Uranium in USA, provides fuel for carbon and emission free nuclear energy. The company is known for high production capacity, licensed mines and processing facilities, and in ground uranium resources compared to any other U.S producer.
What is happening?
Rare earth metals are important for modern technology like electric vehicles but most of the rare earth metal is provided by china. The problem aroused after china announced that they might limit the export of rare earth metals. The company highly needed alternative sources of the material which shows that the company is in the right direction by expanding its reach into the rare earth metal space, although the company’s primary business is mining for uranium.
Energy fuel recently signed agreement with Neo Performance Materials in which the company will process monazite sands into a mixed rare earth carbonate provided by Chemours. Neo will then use the rare earth carbonate at its separate rare earth production plant in Europe. This agreement has given a boost to the overall effort that company has been making to decrease their dependency on China for rare earth metals. Therefore this agreement is viewed in a positive light by the investors.
Every agreement or deal that a company signs, comes with its pros and cons. Energy fuel has been working on uranium since a very long period of time therefore this agreement is a risk and investors should think about it and what the company is doing. It does not mean that the company has taken a wrong step but rather a suggestion for the investors to do their research before they make any long-term investment.